Transcript: Huang Hanquan & Wei Chu on China's Private Sector Promotion Law

Head of the Academy of Macroeconomic Research, NDRC, and Dean of the School of Applied Economics, Renmin University of China, illustrate China's new legal support for the private economy.

The Center for China and Globalization (CCG) held its 14th CCG VIP Luncheon on June 17, 2025. The luncheon, centred on the recently adopted Private Sector Promotion Law, featured Huang Hanquan, Head of the Academy of Macroeconomic Research, National Development and Reform Commission (NDRC); and Wei Chu, Dean of the School of Applied Economics, Renmin University of China.

CCG has posted the video recording of the event on CCG's WeChat blog and YouTube channel.

The transcript is based on the video recording and has not been reviewed by any of the speakers.

Mabel Lu Miao, Secretary General, CCG

Distinguished guests, Your Excellencies, ladies and gentlemen, good afternoon. Thank you all for joining us today at the 14th CCG VIP luncheon. As you know, this is the 14th. It means in the past year, we have already organised at least 13 ones. So it’s a very popular event series in Beijing.

The CCG VIP Luncheon series is initiated and hosted by the Center for China and Globalization (CCG). This event aims to share China’s latest development with embassies in China, international organisations, multinational corporations, and academic experts. It is a high-end platform for international exchanges, providing insights into China’s development and exploring global cooperation opportunities.

Today’s luncheon focuses on China’s new Private Economy Promotion Law, highlighting its institutional innovations and global impact. This discussion aims to deepen understanding of legal developments in China’s private economy and explore the law’s significance for the economy, not just in China, but the rest of the world.

First, please allow me to introduce our speaker for today. They are:

• Mr. Huang Hanquan, Head of the Academy of Macroeconomic Research, National Development and Reform Commission;

• Mr. Wei Chu, Dean of the School of Applied Economics, Renmin University of China.

Before we start, let’s take a moment to acknowledge some of our special guests and VIPs who are here. We have invited diplomats from 14 countries today, including four ambassadors, along with representatives from enterprises, the media, and, of course, some private enterprises. We are also honoured to have the Ambassador of Indonesia to China, our older friend. Welcome, Your Excellency. And the Ambassador of Nepal to China. Welcome. The Ambassador of Pakistan to China. Our older friend as well. Another old CCG friend is His Excellency, the Ambassador of the UAE to China. Welcome again.

We also have diplomats from various embassies. They are: Embassy of Canada, Embassy of Croatia, EU Delegation to China, Embassy of India, Embassy of Japan, Embassy of Malta, Embassy of Norway, Embassy of Pakistan, Embassy of Poland, Embassy of Turkey, Embassy of the United States.

We have distinguished guests from the Chinese State Council as well. We also have representatives from domestic and international enterprises. They are: AirDoc, BMW, Cargill Investment, IG Group, P&G, Tsing Venture, VEREAL, and Ashurst LLP. And from media: Bloomberg, CGTN, China Daily, Der Spiegel, DPA, Kyodo News, Reuters.

Now, let’s welcome Dr. Henry Huiyao Wang, Founder and President of Center for China and Globalization, former Counsellor of State Council to host the luncheon. Welcome, Dr. Wang. Thank you all.

Henry Huiyao Wang, Founder and President, CCG

Thank you, Dr. Miao, and all the distinguished guests, particularly our ambassadors, excellencies, representatives from over a dozen countries, embassy senior officials, deputy heads of missions, and trade counsellors from all those important countries. And of course, we have multinational and Chinese enterprises, as well as media friends. And, of course, top experts from the NDRC.

So this is really a very timely luncheon that CCG is conducting. This is the 14th time since our luncheon last year. We’ve had a luncheon monthly, and that is really relevant to what’s going on in China—and, of course, with the outside world. For example, last month we had a luncheon on trade. We’ve had many events going on, so this is really a timely platform to engage our international dignitaries—ambassadors, representatives of different countries, our international media, and also our multinationals and Chinese companies—to engage with policymakers and experts to really discuss the important things concerning China.

So today, basically, we’re talking about the Private Economy Promotion Law that has just been adopted by the National People’s Congress. And so we’re going to see the institutional innovation and global implications. So, what is the private sector’s development in China? We see that the private sector has made a great contribution to China. They provide over half of China’s tax revenue, 60% of innovation and development, 80% of employment, and 90% of the number of enterprises. So they are the majority holders of the Chinese economy.

I think this is probably very unique—that China has a mixed economy. That is probably something you don’t find anywhere else in the world. You have 60% from the private sector, probably another 20% from SOEs, and another 20% from multinationals. So it’s a trilateral structure. Just for multinationals, for example, President Xi actually recently mentioned that multinationals—when he met with the CEOs of different countries at the beginning of this year in March—also employ 30 to 40 million people in China and generate 30% to 40% of China’s exports.

So you see, this is well-structured. And, of course, private enterprises in China generate even more. Half of China’s imports and exports, more than half of China’s tax revenue, and 80% of the economic activities. So this is a very unique model. And the Private Economy Promotion Law is, for the first time, being elevated to the national level to really safeguard the position of all private enterprises in China. Of course, the State Council and the Chinese government have published many different regulations and documents regarding private enterprises, but none were actually elevated to a national law level, so this institutionalises protection for the private sector.

So I’m sure we’re going to hear from our top two experts, whom I’ll introduce shortly. You can see that this is really a great occasion. China is strengthening the rule of law, strengthening the position of private enterprises, and strengthening the market economy as a major force. I also think that this has implications for multinationals, because multinationals are private sector entities too. So if the private enterprise law applies to Chinese enterprises, it must also apply to multinationals. So this is really good news for all private businesses in China. I’m sure this will further spur investment from foreigners coming to China and from foreign enterprises doing business in China, particularly in this period of geopolitical uncertainty. But I think business and economics are still the main forces, and China is sticking to openness. So I think this is really relevant.

Today, we are actually very fortunate to have invited two top experts to give us introductions and explanations of this private law just promulgated in China.

The first expert is Professor Huang Hanquan. He’s the head of the Chinese Academy of Macroeconomic Research under the National Development and Reform Commission (NDRC). He is a senior research fellow, a doctoral supervisor, and a recipient of the State Council Special Allowance. He holds a PhD from the School of Agriculture and Rural Development at Renmin University—which is a very good university in China—and has undertaken advanced study in the Netherlands and the United Kingdom. So, he’s very savvy on those subjects. Of course, Professor Huang focuses on agriculture and rural development, but more than that, he’s also an industrial economist, macroeconomic policy expert, and urbanisation expert—all of which are fast-developing areas in China. He has led or participated in more than 100 national and ministerial-level research projects, including a major project under the National Social Science Fund on developing new quality productive forces and improving the modern industrial system. He has won 13 provincial ministerial awards for outstanding achievement. So that’s very impressive. We’re going to hear from Dr. Huang in a moment.

We also have another distinguished guest invited today—Professor Wei Chu. He is a professor of economics and the Dean of the School of Applied Economics at Renmin University of China, where he also directs the energy economics program and supervises doctoral candidates. He is trained in management science and economics. He holds a PhD from Zhejiang University, has completed joint doctoral studies at the Toulouse School of Economics, and has held visiting appointments at the University of Nebraska Omaha and the Centre for European Economic Research. He was selected as an Alexander von Humboldt International Climate Protection Fellow, so he has many international exposures as well. He focuses more on energy and environmental economics, as well as applied economic studies, with notable contributions to energy efficiency measurement, marginal abatement cost estimation, and household energy demand analysis. Professor Wei has also led numerous projects funded by the China National Natural Science Foundation and the National Social Science Foundation, and has won the Gregory Chow Best Paper Award from the Chinese Economic Society, the Ministry of Education Distinguished Research Prize, and the NSFC Excellent Young Scientists Grant.

So I’ll stop here. His resume is very long—just to save time. But I want to emphasise again that the Center for China and Globalization (CCG) is a platform we’ve been using for the last 14 VIP luncheons, where we’ve introduced many distinguished Chinese scholars and experts to present on the Chinese economy, new laws, new regulations, and new phenomena. We’re going to have a Q&A after their talks. So I hope that if you have any questions, feel free to ask. This is really a great occasion. This reflects the CCG mission—to bridge communication between China and the world. This is a special platform we have built for ambassadors, embassies, multinational private sectors, and, of course, our media friends.

So I’ll stop here and hope you enjoy your lunch and enjoy the conversation and dialogue. Thank you.

Huang Hanquan, Head of Academy of Macroeconomic Research, National Development and Reform Commission

Dear distinguished guests, ladies and gentlemen,

It's my pleasure to be here to see and meet you and to share some of my views with you. My topic is "The Private Economy Promotion Law safeguards the steady and long-term development of China's private economy".

The Private Economy Promotion Law officially came into effect on May 20 this year. It's China's first basic law specifically focusing on the development of the private sector. It provides strong legal safeguards to promote the private sector's sustainable and high-quality development. The law will give private entities more confidence and drive for their future growth. It will definitely have a significant and far-reaching impact on the private sector and strengthen the economic foundation for Chinese modernisation. So here, I will share my three points of view on this matter.

The first point is the importance of the law. The law clearly demonstrates the Chinese government's consistent support for the development of the private sector. It will better leverage the law's role in safeguarding the private sector's fundamental interests, stabilising their expectations, and delivering long-term benefits. It marks a milestone in the development of China's private sector.

First, it provides a stable legal environment for the development of the private sector. Since reform and opening up, especially since the 18th CPC National Congress, the Chinese government has carried out a series of policies to develop the private sector, whose role in China's economy has kept increasing. By putting the successful policies into law, the Private Economy Promotion Law gives private entities solid reassurance, which is key to stabilising their expectations and confidence for the long run.

Second, it focuses on breaking down institutional barriers for the private sector. The law marks many firsts. It is the first time that clearly defines the legal status of the private sector. It is also the first time that explicitly states that promoting sustainable and high-quality development of the private sector is a major long-term strategy of the country. This helps break down the institutional barriers hindering the private sector and strengthens the foundation for a high-standard socialist market economy.

Third, it helps promote high-quality development of the private sector. Over the past more than 40 years of reform and opening up, the private sector has grown from a small part into a major force. It plays a vital role in stabilising growth, encouraging innovation, creating jobs, and improving people's living standards. However, private entities still face hurdles in market access and resource allocation. The law aims at both current issues and long-term goals, which will help unleash private entities' internal drive and strengthen their development.

My second point of view is the key content of the law. The law has nine chapters and 78 clauses, covering fair competition, investment and financing promotion, technological innovation, well-regulated operation, services, protection of rights and interests, legal liabilities, etc. Reading through the law, you will see the words "equal," "fair," and "equal treatment" used over 20 times. It clearly shows that the principle of the law focuses on equal treatment, fair competition, and equal protection for the private sector.

For example, on fair competition, the law improves the system around market access, resource allocation, and fair competition enforcement. This ensures private entities can compete fairly in the market.

On investment and financing promotion, the law sets rules to encourage private investment, provide better investment services, improve financing regulations, and enhance the accessibility of financial services. This will lower the private sector's red tape cost and create a better investment and financing environment for the private sector.

On technological innovation, the law clearly supports the private sector's R&D, pushes for close ties between industry and academic research, promotes new high-tech commercialisation, strengthens talent support, and IP protection. This will drive private entities to boost their innovation effort.

On well-regulated operation, the law guides private entities to boost their competitiveness by focusing on operating legally, managing risks, and fulfilling social responsibility etc.

On the protection of rights and interests, the law establishes systems to safeguard private entities and their operators. Key protection items include their personal safety, property rights, and operational independence.

On legal liability, the law also spells out legal consequences and sets up an accountability system covering compensation, administrative penalties, and even criminal charges.

In general, the law sets up rules to tackle the problems and challenges the private sector faces, creating a better environment for them to grow.

My third point of view is the impact of the law. As you know, on February 17 this year, President Xi Jinping delivered an important speech at the private sector symposium, which significantly lifted the confidence of private businesses. The law drew widespread attention and positive response from all sectors of society. Private entities are feeling encouraged and full of drive. This can be reflected in the following indicators:

First, new businesses keep growing. By the end of April, the number of private businesses registered was up 7.6% year on year. They now make up 97% of all tax-registered businesses, playing a vital role in keeping China's economy stable.

Second, sales are rising. In the first four months, private sector sales revenue grew 3.6% year on year, higher than the national average level for all businesses. Private sales account for 71% of the national total.

Third, private investment is rebounding. In the first four months, private fixed asset investment rose 0.2% year on year, making a turnaround from the decline seen last year.

Fourth, foreign trade contributions are growing. In the first five months, private enterprises' import and export volume grew 7% year on year, making up 57% of China's total foreign trade, an increase of 2.4 percentage points compared to the same period last year.

Fifth, private enterprise innovation keeps surging. A large number of private high-tech firms are now becoming the leading force in China's technological innovation. For instance, at the beginning of the year, in the field of AI, DeepSeek 's success captured global attention.

Looking ahead, with the law taking effect, the environment for the private sector will get better. Private enterprises will gain more confidence. All this will definitely open up broad prospects for high-quality development in the private sector.

That's all I would like to share with you today. I welcome your comments and questions. Thank you.

Wei Chu, Dean of the School of Applied Economics, Renmin University of China

Dear guests, it's a pleasure to be here and present some insights from an academic institution. My major is in economics, so I will present some evidence of what we have done in this field and share ideas with you.

Today's topic is on the promotion law of the private economy. Let's think about three questions. The first question is: Why? Why is there a law? Why should we have a law? Second, what is the concept of the law? What is included in this law? And third, how will we use this law to take effect? That's my major purpose for this presentation.

My presentation will include three parts. The first is on the origin of the law. The law is not born today. Actually, we have a long history of developing this law. So, I will present the origin of this law and how it developed. The second part is on the characteristics of the law, what it looks like, what it includes, and why we chose this setting and not others. The third part is on the implications. Most of you come from different countries, so I will introduce the Chinese experience and practice, and then let's think about what China's practice means for other countries and globally.

The first part is on the origin. I summarise it with four words: consistency, collaboration, coordination, and effectiveness. The conclusion is that China's Private Economy Promotion Law is very historically consistent. I drew some figures.

From the 1990s to today, over three decades, we can divide the policy evolution into three stages. The first stage is rapid development until 2001. Then, we have a second stage, a leapfrog development stage from 2002 to 2012. During this period, we had a baby law—the Law on the Promotion of Small and Medium-sized Enterprises. This law is the origin of today's law. We had a lot of other policies, such as the 36 measures to support non-public enterprises in 2005. Beginning from 2013 to now, we are in a high-quality development stage, with different policies, regulations, documents and others until today's law.

That's the whole development of today's policy system. So, today's promotion law is not a new birth; it has been developed over a long time, three decades. That's the whole history.

And the second figure I would like to show you is that the law and the policy system is horizontally collaborative. That means a lot of ministries, institutions and other branches are involved in developing this law. For example, in different private economic policies, you can find that there are different ministers. The number is issued by this minister, and the right side of this figure means that this policy is targeting human resources, the market environment, or financial issues. You can see a lot of ministers are involved, to collaborate, to work together, to push the development of the policy. That's my second conclusion, that is, horizontal collaboration.

The third point is that our policy is integrated from the central government and the local government. So that means when the central government initiates some policy or law, the local government will follow up and they will have a more comprehensive system to support the implementation of the central government.

By counting the number of policies, you can find that we have three stages. During the latest stage, we can find that this one means the policy issued by the central government, and this one is issued by the provincial government. That one means that to the city level. We have solid support from the local government. That's the third point.

The final point is that our policy is very effective. I will present some evidence.

From the left figure, you can find that the bar means the number of private entities. The data is very limited. I don't have the latest one. Until 2022, the registered entities of private enterprises reached 30 million in China, and the share of private enterprises in total enterprises reached higher than 92%. It's a very high penetration rate.

From the right side, it's a task of economics. We run a very simple regression. The horizontal, the x-axis, means the number of the policy, and the vertical dimension measures the number of the newly added private enterprise. We just use a very simple regression to describe the correlation. You can find it's significantly positive. That means our policy actually developed leads to or is associated with higher numbers of newly added private enterprises. That means the policy encourages the setting up of new private enterprises. That's the first part of my presentation, that our development has a long history and is well-established

Let's go back to our second question: What is the concept of our law?

Actually, this law has a very significant characteristic. That is, confronting problems head-on with a problem-oriented approach. That means we don't fear the problem; we don't fear the shortage. Let's confront it and let's solve it.

So, I will highlight fair competition, rights and interest protection, actor support, technology innovation, and also the operation. I have four points to highlight in my slides.

The first point is regarding fair competition. My institute is a university, and we run a lot of surveys for enterprises, so we conduct a routine survey on private enterprises. This figure tells you that when we ask the enterprises: What's the major obstacle to fair competition and market access barriers? We set different options under which the enterprise responds to these options, and we find that the major obstacle is in the bidding and the government procurement procedure. Also, we find a lot of barriers in infrastructure and public utilities. So let's see how this law responds.

In this law, we have a very clear response to this challenge. You can find that we're using a nationwide, unified negative list system. It's a blacklist. We also have very strong words, like "forbidden" or "no," to regulate the action or behaviour of the government. We also see some positive words, that is, "support" private economic organisations' involvement in major national strategies and projects. That's all in response to this concern.

I want to show you that the left side is the perception and attitude of the enterprises. They have this kind of concern. So, regarding this concern, our law has very specific information to solve this kind of problem.

The second is on interest protection. We also have some questionnaires for the enterprises, like the most expected measures for rights and interests protection.

You can find here that the majority of these respondents say they hope there is a complaint platform, and they also expect preventing criminal means, standardising mandatory acts, intelligence protection, and others. You see here in this law, we all have very specific provisions, like here, it's "forbidden." And we also have some platforms to respond to these complaints. Also, note here, it's a very negative word, illegal or improper behaviour to charge enterprises is "forbidden." That's all evidence of this.

And the third point is factor support. It's a common challenge, I think it's a common challenge. It's hard for the bank to find suitable and targeted enterprises to get a loan or other financial support. It's a global challenge, not just in China, but I think it's a challenge for other countries as well.

Here, you can see that the most expected measures for enterprises are about the credit scale and the credit intensity. So, this law also sets up some very specific measures to solve this kind of problem.

Also, regarding technology innovation, you see the major obstacle that enterprises worry about is the cost. The cost is too high for small enterprises. It's hard to overcome. They worry about the financial issue; they have no sufficient resources to digitalise, to apply for new technology. So, the cost is a major obstacle.

So here you see, we support the private economy to be involved in the market and the platform construction. We also support private economic organisations to apply for new technology and encourage private companies to use talents and to use more labour resources to solve the technology innovation issue. This means the law has very specific and targeted measures to counter this.

We also find that regarding enterprise authorisation, this is a self-evaluation for further development of the enterprises. You see here, around 6% of private enterprises have no positions for risk control. They have no criminal compliance system within their companies. So regarding this shortage, regarding this barrier, this law encourages private companies to establish an inner system to help manage the risk.

So, all this evidence shows that this policy, this law, is very targeted and very specific to solving the obstacles confronting private enterprises.

So what does that mean for this law? I think we can at least have several conclusions about the short-run effect and the long-term expectations, and also concerning the global implications.

The first is that we have solved some long-standing issues, like the overdue payment issue. We're using several rounds of our survey to show that after the release of this law, the share of companies that have overdue payment has decreased significantly. But it's only based on our survey. It's not representative; it's our samples.

Also, we find that all respondent enterprises are very encouraged. We asked them, What's the most remarkable impact of this law that you expect? More than 74% of the respondents think it will promote fair competition. And we also have a large proportion of enterprises that think this law will protect their rights and interests, and also will standardise operations, promote innovation, and strengthen government services. You can see that this law is very positive.

The most important thing is that in the long run, what's the attitude of the enterprises? How do they see China's future?

You see here, it's last year's survey. The average score is 3.1. The total score is five. But this year, after the release of this law, it increased a little bit to 3.2. We also ask, what's the expectation for the medium term to 2027? You can see here a big jump. And also, for the long term, to 2030, what's your attitude? They are more positive, at 3.58.

We also find that the big change is the result of [the increase in] the people who are most optimistic. The share of people who are highly optimistic increased from 6% to 16%, 19%, and 26%. It's a very big change. That means a lot of people are strongly positive about China's law and China's future. That's the attitude of China's enterprises.

And we find that most of these enterprises have taken action to switch to high-quality development. What kinds of measures have they adopted?

They increased the proportion of independent innovation. The percentage has surpassed half. Also, half of them are pursuing high-end, intelligent, and green development. That's a big change. The enterprises are also realising the challenges from the outside and the inside, and they would like to change themselves more quickly to become more flexible to the changes of the world.

What can we learn from this story? If we look at the text in the law, we can see a lot of "no," "forbidden," "encourage," and "support." I mean, behind these positive and negative words, they reflect the boundary between the market and the government. When we say "no," "forbidden," that means you stay back. When we say "encourage," "support," we hope you move ahead. That means our boundary between the market and the government is clearer and has improved.

So we think we have three conclusions from learning China's Private Economy Promotion Law. The first is that the rule of law is the best business environment. I think it's acknowledged. And the second is that we have an innovative institution. That means we propose a close and clean government-business relationship. I mean, China, why did China achieve a lot of success during the past decades?

Let's think about a big issue. Why did China succeed? I think China explores the boundary between the market and the government, and the boundary is dynamic. It's not fixed as a textbook; say, the government should do something, and the market should do something. No, I think the Chinese government is very problem-oriented. They will test; they will explore. If we find the wrong way, we will come back; if we find the right way, we will go ahead. That's our experience. That's our lesson. So, a close and clean government-business relationship is our conclusion, our finding, and our contribution to the world.

And the final is a Chinese-style modern enterprise system. Before this concept, we learn the enterprise system from the textbook, from the United States. But let's think about how this enterprise originated. The modern enterprise system originated in the United States, in the Western world. Their birth is based on their local environment and their historical stage. But now China has a different environment and is in a different stage. You cannot compare children with senior people because we need different elements.

So, in our culture, in our context of Chinese culture, and in our current stage, what do we need? We need a Chinese-style modern enterprise system. Using this enterprise system, our private enterprises are encouraged to do more environment-friendly and society-friendly [activities]. And we also have the Chinese state donation system. It's all totally original from Chinese history and culture.

So I think the Chinese-style modern enterprise system is also a new concept that we need to explore. Definitely, the target of this type of enterprise system is to reach world-class enterprises as President Xi Jinping claimed. That's all. Thank you.